Rural Housing Service Serving Rural America

1
Rural Housing ServiceServing Rural America
2
Single Family Housing

• Section 502 Direct Loan program
• Section 502 Guaranteed Loan program
• Section 504 Housing Repair Loan and Grant
  programs
• Mutual Self-Help Housing program
• Rural Housing Site Loans

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Single Family Housing Programs

• Section 502 Rural Housing Direct Loans

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Section 502 Direct Loans

• Purpose
• to provide home-ownership opportunities to rural
  families with very low and low incomes
• loans may be used to buy, build, improve, or
  repair rural homes

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Section 502 Rural Housing Direct Loans

• Eligibility
• Families must be without adequate housing, but be
  able to afford the mortgage payments, including
  taxes and insurance. Payments are typically
  within 22 to 26 percent of an applicant's income.
  

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Section 502 Rural Housing Direct Loans

• Eligibility
• Very low income is defined as below 50 percent of
  the area median income (AMI)
• Low income is between 50 and 80 percent of AMI

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Household Income

• Typical for most rural counties in Georgia
• Very low low
• 1 person 15,500 1 person 24,800
• 2 person 17,700 2 person 28,350
• 3 person 19,500 3 person 31,900
• 4 person 22,150 4 person 35,450

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Section 502 Rural Housing Direct Loans

• Eligibility
• Applicants must be unable to obtain credit
  elsewhere, yet have reasonable credit histories.
  

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Section 502 Rural Housing Direct Loans

• Eligibility
• There is no required down payment.
• Repayment feasibility is based on repayment
  ratios.

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Section 502 Rural Housing Direct Loans

• Terms
• Loans are for up to 33 years (38 for those with
  incomes below 60 percent of AMI and who cannot
  afford 33-year terms).
• The term is 30 years for manufactured homes.

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Section 502 Rural Housing Direct Loans

• Terms
• Interest rate is set by RHS, currently the
  interest rate is 6.125.
• Interest rate is modified by payment assistance
  subsidy.

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Section 502 Rural Housing Direct Loans

• Payment assistance
• The amount of payment assistance subsidy is
  determined by adjusted family income as
  percentage of AMI so that a family pays from 22
  to 26 percent of their income for principal,
  interest, taxes, and insurance (PITI) up to the
  promissory note rate.

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Section 502 Rural Housing Direct Loans

• Standards
• Housing must be modest in size, design, and cost.
  
• Houses must meet the voluntary national model
  building code adopted by the state and RHS
  thermal and site standards.

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Section 502 Rural Housing Direct Loans

• Standards
• Manufactured housing must be permanently
  installed and meet the HUD manufactured housing
  construction and safety standards and RHS thermal
  and site standards.

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Area Loan Limits

• Predominant limits per area
• Area 1 118,000
• Area 2 112,900
• Area 3 106,700
• Area 4 101,000
• Area 5 101,900
• Area 6 101,100
• Limits are reviewed annually.

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Section 502 Rural Housing Direct Loans

• Regulation/Handbook
• 7 CFR Part 3550 and HB1-3550

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Section 502 Direct Loan Customer
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Single Family Housing Programs

• Section 502 Loan Guarantees

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• Sec. 502 Guaranteed loan customer

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Section 502 Rural Housing Loan Guarantees

• Purpose
• Section 502 loans guarantees are primarily used
  to help moderate income households purchase homes
  in rural areas. Funds can be used to build or
  purchase a home.

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Section 502 Rural Housing Loan Guarantees

• Eligibility
• Income of up to 115 of median income for the
  area/state.
• The lender determines repayment feasibility,
  using repayment ratios.

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Household Income

• Typical for rural counties in Georgia
• 1 person 45,500
• 2 person 52,000
• 3 person 58,500
• 4 person 65,000

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Section 502 Rural Housing Loan Guarantees

• Eligibility
• Applicants must be without adequate housing, but
  be able to afford the mortgage payments,
  including taxes and insurance. In addition,
  applicants must be unable to obtain credit
  elsewhere, yet have reasonable credit histories.

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Section 502 Rural Housing Loan Guarantees

• Approved lenders
• Any state housing agency
• Lenders approved by HUD, VA, Fannie Mae, or
  Freddie Mac. Direct farm credit system lenders
  also qualify.
• Any lender participating in certain other USDA
  guaranteed loan programs.

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Section 502 Rural Housing Loan Guarantees

• Terms
• Loans are for 30 years.
• Interest rate is set by the lender.
• No required down payment.

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Home Financed Through Section 502 Guaranteed Home
Loan
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Section 502 Rural Housing Loan Guarantees

• Standards
• Housing must be modest in size, design, and
  cost.
• Houses must meet the voluntary national model
  building code adopted by the state and RHS
  thermal and site standards.

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Section 502 Rural Housing Loan Guarantees

• Standards
• Manufactured housing must be permanently
  installed and meet the HUD Manufactured Housing
  Construction and Safety Standards and RHS thermal
  and site standards.

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Statistics - Fy2003

• loans obligated 479
• Average loan amount 107,950.00
• Funds used 51,707,960.00
• Funds available 0.00

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Section 502 Rural Housing Loan Guarantees

• Regulation/handbook7 CFR part 3555

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Single Family Housing Programs

• Mutual Self-Help Housing

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Mutual Self-help Housing Program

• How It Works
• Section 525 technical assistance grants go to
  non-profit and municipal organizations to provide
  necessary technical assistance to families in
  construction, budgeting, and homeownership
  basicstypically, participating families finance
  their homes through a Section 502 direct loan

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Mutual Self-help Housing

• Technical Assistance Grants
• Grant funds may be used to pay salaries, rent,
  and office expenses of the TA provider.

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Self-Help Housing Neighborhood
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Mutual Self-Help Housing Program

• Purpose--to make home ownership affordable to
  rural families by allowing them to build their
  own homes and earn sweat equity

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Mutual Self-help Housing

• Regulation/Handbook
• 7 CFR Part 3550 and HB2-3550.

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Single Family Housing Programs

• Section 504 Rural Housing Repair and
  Rehabilitation Loans and Grants

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Section 504 Rural Housing Repair and
Rehabilitation Loans and Grants

• Purpose
• The Very Low-Income Housing Repair program
  provides loans and grants to very low-income
  homeowners to repair, improve, or modernize their
  dwellings or to remove health and safety hazards.
  

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Section 504 Rural Housing Repair and
Rehabilitation Loans and Grants

• Eligibility
• Homeowner-occupants must be unable to obtain
  affordable credit elsewhere and must have very
  low incomes, (below 50 percent of the area median
  income).
• Repairs and improvements must make the dwelling
  more safe and sanitary or remove health and
  safety hazards.

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Section 504 Rural Housing Repair and
Rehabilitation Loans and Grants

• Eligibility
• Grants are only available to homeowners who are
  62 years old or older and cannot repay a Section
  504 loan.

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Section 504 Rural Housing Repair and
Rehabilitation Loans and Grants

• Terms
• Loans of up to 20,000 and grants of up to 7,500
  are available.
• Loans are for up to 20 years at 1 percent
  interest.

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Section 504 Rural Housing Repair and
Rehabilitation Loans and Grants

• Terms
• Grants must be repaid if the property is sold in
  less than three years.
• Repairs financed with grant funds must result in
  the removal of health and safety hazards.

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Section 504 Rural Housing Repair and
Rehabilitation Loans and Grants

• Terms
• A grant/loan combination is made if the applicant
  can repay part of the cost.
• Loans and grants can be combined for up to
  27,500 in Section 504 assistance.

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Section 504 Rural Housing Repair and
Rehabilitation Loans and Grants

• Standards
• Repaired properties need not meet RHS code
  requirements, but water and waste systems and
  related fixtures must meet local health
  department requirements.
• Water supply and sewage disposal systems should
  meet RHS requirements.

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Section 504 Rural Housing Repair and
Rehabilitation Loans and Grants

• Standards
• Major health and safety hazards must be
  corrected.
• All work performed must meet local codes and
  standards.

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Section 504 Rural Housing Repair and
Rehabilitation Loans and Grants

• Regulation/Handbook7 CFR Part 3550 and HB1-3550

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Single Family Housing Programs

• Rural Housing Site Loans

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Rural Housing Site Loans

• This program provides funding for a public or
  private non-profit organization to buy and
  develop building sites, including the
  construction of access roads, streets, and
  utilities.

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Rural Housing Site Loans

• Sites developed under this program may be sold to
  individual households, non-profit organizations,
  public agencies, and cooperatives providing
  financial assistance for housing to low- and
  moderate-income families.

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Rural Housing Site Loans

• Purpose
• Section 523 loans are made to acquire and develop
  sites only for housing to be constructed by the
  self-help method.
• Section 524 loans are made to acquire and
  develop sites for low- or moderate-income
  families (other than self-help).

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Rural Housing Site Loans

• Eligibility
• Section 523 loans are limited to private or
  public nonprofit organizations that will provide
  sites solely for self-help housing.
• Section 524 loans are made to private or public
  nonprofit organizations.

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Rural Housing Site Loans

• Terms
• Loans are for two years.
• Section 523 loans - 3 percent interest.
• Section 524 loans - Market rate of interest.

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Rural Housing Site Loans

• Regulation/Handbook FmHA
• Instruction 444.8 (CFR Part 1822
• Subpart G). FmHA Instruction 1924-C.

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Single Family Housing Programs

• Housing Application Packaging Grants

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Housing Application Packaging Grants

• This program provides grant funds to tax-exempt
  public agencies and private non-profit
  organizations to package Single Family Housing
  Loan applications for submission to Rural Housing
  Service.

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Housing Application Packaging Grants

• Packagers in certain States and Counties assist
  very low- and low-income applicants by
  prescreening, making preliminary eligibility
  determinations, ensuring the application is
  complete, and helping the applicant understand
  the program.

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Housing Application Packaging Grants

• Packagers receive training from the Agency and
  receive a certificate to participate in the
  program.
• The certificate qualifies the grantee to package
  applications for one year.

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Rural Development

• For more information about these or other
  Rural Housing Service programs, contact the Rural
  Development State Office 355 E. Hancock Avenue,
  Athens, GA 30601, telephone [phone]
• or visit our website at www.rurdev.usda.gov/g
  a

The Rural Housing Service is an Equal Opportunity
Lender and its programs are operated on an equal
opportunity basis. Complaints of discrimination
may be filed with the Secretary of Agriculture,
Washington, D.C. 20250